Indian industry to cut production

A survey released today by Federation of Indian Chambers of Commerce and Industry (Ficci) has  revealed that Indian industry is planning production cuts in the range of 10% to 50% in the period between October 2008 and March 2009.

The sectors which are likely to see production cuts include textiles, metal and metal products, machinery and equipment, leather as well as chemicals (see table).

More over, sectors like textiles, metal and metal products, leather and  jewellery could see job cuts in the range of 10-30%, surveyed firms told Ficci.

The survey also noted that in October sectors like  textiles, metal and metal products, leather could see a dip in production growth, compared to the same month last year.

“Despite Government’s stimulus package, Indian manufacturing sector is not likely to see any revival in its growth soon,” a Ficci release said.

The package announced by the government includes enhanced credit guarantee, cheaper loans for export oriented labour intensive sectors as well as Rs 20,000 cr as additional plan expenditure.

 

 

Sector	Change in Production in Oct 2008 vis-à-vis Oct 2007 (%)	Production cuts planned for next five months (%) (Nov. ’08 to Mar. ’09)	Downsizing of Employment (%)
Textiles	-3.9%	10-40%	15%
Metal and Metal Products	-30%	10-50%	10-15%
Machinery & Equipment	5%	40%	No downsizing expected
Chemical and Allied Products	17%	15-25%	No downsizing expected
Leather and Leather Products	-13% (Minimum)	15-50%	10-30%
Other Manufacturing Sectors	-6 to -30%	10% (Minimum)	Significant downsizing in sectors like Jewellery but not any major downsizing in other sectors.